The first of several major antitrust claims against the National Collegiate Athletic Association is set to go to trial in federal court here on Monday. The case, which challenges one of the NCAA’s bedrock principles—that players can’t be paid for the commercial use of their names or images—threatens the association’s longstanding rules on amateurism.
The plaintiffs, who include Ed O’Bannon, a former UCLA basketball star, and other current and former Bowl Subdivision football players and Division I men’s basketball players, say the NCAA has unfairly prevented them from earning a share of the billions of dollars of revenue the association brings in from television broadcasts and other commercial products in which they appear. They are seeking an injunction that would put an end to the NCAA’s rules limiting their ability to profit from their images.
The NCAA denies the allegations and has vigorously defended its system, arguing that its rules are necessary to maintain competitive balance and to protect academic values. NCAA athletes are students first, the association has long argued, and allowing them to license their images would create a “bidding war” for players that would undermine their ability to be effective students.
Lawyers for the plaintiffs say they plan to poke holes in the NCAA’s education claims, calling witnesses who will expose details about colleges’ channeling of athletes into easy classes and putting extensive demands on their schedules. Those commitments, which can require up to 40 hours a week of their time, prevent many athletes from receiving a meaningful education, the plaintiffs say.
“The NCAA puts upfront this commitment to education,” said Michael D. Hausfeld, a lawyer for the plaintiffs. “We’re going to test the validity of that claim.”
Donald Remy, the NCAA’s chief legal officer, rejects the criticism, saying that the association plans to present evidence showing that many football and basketball players graduate at rates equal to or higher than other students with similar backgrounds as theirs.
“A large percentage do come for the purpose of getting an education—a quality education and a degree,” he said. “Sometimes the system fails some individuals, but most of them walk away with exactly what they came to school to get.”
A ‘Texbook Cartel’
Last week both sides laid out their legal strategies in briefs submitted to Judge Claudia A. Wilken of the U.S. District Court here, who will preside over the case. The trial is expected to last about three weeks.
To win at trial, the plaintiffs must prove that the NCAA’s rules cause significant anticompetitive effects within a relevant market.
In their brief the plaintiffs argue that the NCAA operates as a “texbook cartel,” preventing players from selling or negotiating licenses for the use of their names, images, and likenesses.
The plaintiffs say the NCAA’s rules cause significant harm to the “college education” market and the “group licensing” market, limiting financial opportunities for athletes and leading some players to depart college early.
The plaintiffs intend to hear testimony from a former vice president of Electronic Arts, a video-game manufacturer, showing that the company would have paid college football and basketball players for the use of their names and likenesses if not for NCAA rules prohibiting such payments. The testimony is an attempt to establish that there is a market for players.
The NCAA disputes those claims, arguing in its brief that the plaintiffs cannot adequately prove that its rules have caused players to leave college early. The association also disputes that it profits off of players’ images or prevents former athletes from entering into licensing contracts. (The plaintiffs say such reasoning ignores that players’ licensing rights for television broadcasts and other commercial products are sold while they are still in college, making it difficult for them to negotiate deals after their eligibility ends.)
The NCAA also challenges whether a market exists for the players to license their images. It says the plaintiffs have previously argued that there is no such education market—that colleges merely vie for players’ athletic services, not for their matriculation as students.
The association also denies the viability of a group-licensing market for college athletes.
“No statute or court decision in any state has ever recognized a right-of-publicity claim by a participant in a sporting event against a broadcaster for the use of his [name, image, or likeness] in a live broadcast of the game,” the NCAA’s brief states. “There is no reason why any broadcaster would purchase any group license” for the use of athletes’ images.
The association also argues that athletes do not have the right to license their images or likenesses because they do not create the football or basketball games or control the stadiums in which those games are played.
“They are only in the stadium at all,” the brief says, “because their colleges and universities have agreed to let them play.”
‘Six-Figure Incentives’
If the plaintiffs can prove a substantial anticompetitive effect, the court would consider whether the restraint produces offsetting procompetitive benefits, a burden the NCAA would have to prove.
The association argues that its rules increase consumer choice and demand, and that if athletes began receiving large licensing payments, fans’ interest would significantly decline.
If athletes were allowed to enter into licensing agreements, such a change would cause many colleges to leave Division I because they would lack the money to compete in “cash bidding” for recruits, the association argues. It believes that elite football and basketball recruits would receive “six-figure incentives” to attend college.
Such offers, the NCAA said, would also disturb the competitive balance in big-time sports, tilting the distribution of talent and success toward colleges with the most money.
The plaintiffs argue that the NCAA’s system already favors the wealthy programs, and that removing the restraint would not exacerbate that imbalance.
A Deferred-Pay Plan
If the NCAA satisfies its burden of establishing procompetitive benefits, the plaintiffs must show that the association could have achieved the same goals through less-restrictive alternatives.
One solution the plaintiffs propose is a deferred-compensation fund for men’s basketball and football players, which would allow licensing revenue to flow to athletes after their eligibility ends.
The plaintiffs say that the injunction they seek would not disrupt the connection that fans have with college sports, and that increased benefits to players could take many forms.
Mr. Remy, the NCAA’s top lawyer, says the association is already moving toward providing players with additional benefits—but that is happening outside of the courts.
“Colleges continue to evaluate issues of athlete welfare, and we will always do that,” he said, “as long as it’s consistent with the collegiate model of athletics.”
